Hobart dwelling prices grew 4 per cent during COVID-19 period

Insatiable demand for Hobart real estate is impacting prices within the city — and in surrounding areas.

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ANOTHER real estate market report has highlighted the ever-increasing price of houses in Hobart and surrounding regional areas.

The CoreLogic Quarterly Economic Review: November quarter data shows Hobart dwelling values rose 3.9 per cent from the end of March through to November, and regional Tasmanian dwelling values increased 5.8 per cent in the same period, with both dwelling markets sitting at a record high in November.

CoreLogic’s Head of Research Australia Eliza Owen said prices in regional Tasmania had been supported by a “spillover” of demand from the high-growth city of Hobart.

Gross rent yields for dwellings in Hobart declined a significant 40 basis points over the year to November, but at 4.6 per cent were still the second highest of the capital cities behind Darwin at 6 per cent.

The Hobart experience was in contrast to a decline in values nationally, however housing market values did not see the large decline anticipated at the start of the COVID-19 pandemic.

Housing values fell 1.9 per cent between March and September before moving into a recovery trend, increasing 0.4 per cent nationally through October and 0.8 per cent in November.

Ms Owen said relative to previous housing market downturns, the current national decline through to November was relatively mild, with dwelling values 0.7 per cent below the pre-COVID levels.

“There are numerous factors which have contributed to the prevention of a larger downturn in dwelling values including the institutional, co-ordinated response to the pandemic, which have seen low borrowing costs, added incentives for first home buyers and the extension of mortgage repayment deferrals limiting forced sales,” Ms Owen said.

Ms Owen said despite an initial slump in housing finance through the beginning of the year due to the COVID-19 pandemic, the year to October saw a remarkable 14.5 per cent lift in the volume of finance secured for the purchase of property, according to ABS lending indicators.

Another recent report showed the frenzied pace of Hobart’s real estate market, with homes on the market for a median of 28 days — the fastest results for a capital city.

The SQM Research data showed that in September, Hobart’s median dwelling price, houses and units combined, was $489,059 — larger than Adelaide, Perth and Darwin.

In September and October there were 21 and 25 sales in excess of $1 million. But November was another story altogether with 42 sales, far and away the busiest month of the year in this part of the market.